Polish fertilizer producers face Asian capacity challenge: bank

24 September 2013 16:30  [Source: ICIS news]

LONDON (ICIS)--Polish fertilizer companies could miss out on some of the benefits from improving market trends because of increasing fertilizer production in Asia, a bank said on Tuesday.

Stock investors should see “an opportunity to sell” in the current valuations of Poland-based fertilizer companies, including Grupa Azoty, said Tomasz Kasowicz, a Warsaw-based analyst at Bank Zachodni.

“Polish fertilizer companies may not fully benefit from the improving macro trends because of structural changes resulting from capacity additions in Asia,” he added in a note to investors.

Kasowicz gave both Grupa Azoty and its multi-component fertilizer unit Zaklady Chemiczne Police (ZChP) a ‘sell’ rating, but recommended buying shares in another Grupa Azoty unit – Polish nitrogen fertilizer producer Zaklady Azotowe Pulawy (ZAP).

ZAP was benefiting from its superior fertilizer portfolio, he said.

ZChP was rated ‘sell’ by Kasowicz, despite the move it announced in late August to vertically integrate phosphate feedstock supply by buying a controlling interest in a Senegalese phosphate mining company.

State-controlled Grupa Azoty became Europe's second-largest fertilizer producer in January this year by gaining control of ZAP, having already acquired ZChP and nitrogen fertilizer producer Zaklady Azotowe Kedzierzyn in the preceding two years.


By: Will Conroy
+44 20 8652 3214



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